The implementation of the trade agreement between the US, Canada, and Mexico reveals points of divergence which had not been foreseen by the parties. But thanks to constant adjustments and an effective settlement of disputes, the agreement is taking shape.
As a matter of fact, after a long wait, the dispute between the United States and Canada over solar panels seems to have finally found a solution. Both countries have agreed that the Americans must end their tariffs on solar panels manufactured in Canada. This decision follows the publication of the report of the dispute resolution team. Indeed, a dispute settlement panel has agreed that tariffs on Canadian-made solar products imposed in 2018 by former President Donald Trump violated the terms of the USMCA agreement. The final report, released to the public, concluded that by continuing to subject Canadian exports to "safeguard measures," the United States was in violation of its obligations under the agreement.
Canada's Minister of International Trade, Mary Ng, said the agreement reflects the two countries' shared desire to fight climate change and develop the renewable energy industry.
The Stakes of the Dispute
Canada has argued that the United States violated the agreement by “not excluding imports from Canada from its safeguard measure which operated to reduce imports of Canadian (solar) products and not to allow reasonable growth.” On the American side, the argument put forward was that the agreement between the three countries had not yet come into effect when the various customs duties were applied. Therefore, they could not be challenged under the new agreement. This situation caused Canadian exports of solar products to the United States to drop by more than 80%, according to Ottawa.
Contrary to what one might think, the multiplication of disputes arising from the implementation of the USMCA and their settlement clearly shows that the various parties have the will and the ability to overcome their differences in order to reach an agreement that will hold all its promises over time. However, the road is still long because the list of disputes to be settled continues to grow.
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